Liquidation advice needed please

H

Harper

Guest
After 20 years of operating we have been advised that our only option is liquidation. however the accountant has told us that the company cannot afford to liquidate nor can we continue to operate!! we were told to "go home and think about what we want to do" could someone please advise us? i have read all the threads on liquidation and found the amount to vary wildly.
we are a small company with debts of prob 30k , 2 leased vehicles and a personal guarantee for an overdraft of 30k. 4 employees (2 are directors). this is a very upsetting situation for all involved and we are devastated for the employees who have been with us from the very start - it was mainly because of them that we kept at it - putting personal money in whenever we could. (yes stupid i know but these things become personal over time and we feel like a family breaking up rather than a company). any help would be greatly appreciated.

questions are :

1) personal guarantee on overdraft 30k - 15k each director - will this follow us forever and do we have a say how we pay it back. (Bank are trying to convert to personal loan but we said no)

2) can someone recommend a liquidator for a small company? we dont know what we are looking for and dont want to go on price alone.accountant was useless at best and hostile at worst.

3)leased vehicles - can we sell them now to clear the lease - maybe getting more money than a liquidator would??

thanks in advance for any advice - Harper
 
Wow I'm sorry to hear about the loss of 4 more jobs.

1. Is the debt solely the overdraft?

2. AFAIK having given a personal guarantee on the overdraft, it's effectively a personal loan anyway?
For this reason, when my bank asked for personal guarantees for overdrafts and credit cards, I decided I could get by without them.
Look at the applicable rates of interest and get independent advice about what best to do.

3. Look at the T&Cs for the leased vehicles for info about breaking the lease. You can't sell them because they're not yours (and neither can the liquiditor, right?) - they still belong to the leasing company.
 
Sean

thanks for the reply, debts in total are about 60k - 30k of which is the overdraft - we are at the top of it now so not an option to " do without" unfortunately. i understand what you are saying about the personal guarantee but in another post on personal guarantee (on a lease) Brendan mentioned that the bank had agreed terms with the company (separate entity) so i am really wanting to clarify if we can control this debt going forward, i.e we say we can pay x per month rather than they dictate the repayment. we are of course willing to honour the personal guarantee but with NO income at all we want to control it.

On the vehicles - i think we can sell them once we settle with the leasing company. so too can the liquidator AFAIK but he wouldnt be as determined to get the best price and may leave us with a shortfall still owning to the leasing co.

thanks - Harper
 
Hi Harper,
so your debts are 60k and whatever is left on the leased vehicles.
-30k unguaranteed debt
-30k guaranteed debt

The leases - are they also personally guaranteed?

Your only assets are any profit from the resale of the vehicles - is there any profit there at all? How much do you think?

You have no income and no chance of trading out of difficulty.

On others posts, it's mentioned that you need to hold a creditors voluntary liquidation as the first step as you are insolvent.

If you find your current accountant unsatisfactory, shop around for another. Maybe he's annoyed he won't get his fees?

BTW, apparently anyone - other than someone working for the company - can be a liquidator. If you know someone competent enough with formfilling etc. you can liquidate the company yourself using that 3rd party as a liquidator.
 
Hi Sean

figures are correct. no chance of trading out of this as we are not getting in enough to break even let alone cover existing debts so each month the debt gets bigger. plus we have been told we are insolvent so its an obligation to cease trading immediately.

we have a meeting with a liquidator tomorrow. hopefully there will be some light at the end of the tunnel but it looks like the personal guarantee will follow us regardless. dont think the vehicles are personally guaranteed so thats a bit of good news.

thanks for your interest and your replies, will let you know how it goes.

Harper
 
Good luck Harper. Not an easy time.

BTW, really excellent advise from Sean.c on this thread and many others in this section.
 
update

thanks all for your concern and advice.

we met with liquidator yesterday, positive meeting (as positive as these things can be). liquidation is going to cost 6k. personal guarantees will follow us so going forward we will each carry a debt of 18k - not the end of the world - we know there are much worse things out there and people are much worse off. had meetings with worst hit creditors who were amazingly understanding ( suppose we not the first or the last). we are now tackling this head on. The good news is because we were not reckless or fraudulent in our business - we can move on from this and work which is great as we are not entitled to a penny even though we paid tax and employed people for 20 years. should take a few weeks to be fully over for us. sad day!!

thanks again for your support
Harper
 
If you post on the Benefits forum, you might find you are actually entitled to some benefits. No free eye exams, though :)
 
quick update

just a quick update on this, we borrowed the money to liquidate the company and it went ahead. creditors meeting was fine with no creditors turning up. so its done, mixed of sadness and relief. liquidators told us to now forward all calls post and enquiries related to the company to them we no longer have to deal with one thing . serious weight off our shoulders now. we now have a future to look forward to although with some debt from personal guarantees. my advice to people in the same position, meet it head on. what seemed hopeless just over a month ago is now over and finished for us. thanks for your support - especially sean c. Harper
 
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